Inquiring minds keep poking around at problems in Spain and everywhere one looks problems are far greater than government officials would like you to believe.
Please consider this Google Translation from the Guru’sBlog Spanish Economic Drama, Over Half Federal Budget Devoted to Pensions, Unemployment and Interest
Today the Minister of Finance and Public Administration, Critobal Montoro, has submitted to Congress the 2012 State Budget , and I am frightened by the huge numbers that are involved in pensions, unemployment and interest.
37.1% of total state budget will be allocated to pension payments, 9.2 % for unemployment benefits , while another 10.5% will go to interest payments (28.848 million euros, equivalent to 2.7% of GDP.
In all, these three items account for 56.8% of total State Budget 2012.
Spain Warns of Soaring Debt
The AP reports Spain Warns of Soaring Debt as Unemployment Rises
Budget Minister Cristobal Montoro said borrowings of 186.1 billion euros ($248 billion) this year will take the debt-to-GDP ratio to 79.8 per cent from 68.5 per cent in 2011, well above the EU 60 per cent limit.
“Spain is a critical situation. That is what we’re trying to address,” he told a news conference after delivering the conservative government’s cost-cutting budget for 2012 to parliament.
Adding to the strain on public finances, the number of people out of work rose for the eighth straight month in March as Spain headed back to recession with the economy expected to shrink 1.7 per cent this year after expanding 0.7 per cent in 2011.
The number of workers registered as without work climbed 0.82 per cent from February to 4.75 million, the highest figure since the current statistics series began in 1996, the labour ministry said.
Spanish unemployment is up for the 8th consecutive month and may soon top 25%. Moreover, revenues will drop substantially.
There is no way Spain can meet its deficit targets.
In response, Brussels will soon be demanding cuts in pension benefits. More violence is right around the corner.